Auto sales drop by 220,000 units

Nissan Motor Co. led a drop in domestic auto sales in May as higher taxes and fuel costs cut demand for new vehicles, an industry body said Monday.

Total sales of cars, trucks and buses fell 6.1 percent to 221,377 from a year earlier, the Japan Automobile Dealers Association said. The total excludes minicars.

Consumer spending has slumped because of inflation driven by higher food costs and record gasoline prices. Car sales also dropped after the tax rate on automobiles rose to 5 percent in May from 3 percent in April.

"With gasoline prices so high, consumer sentiment is taking a big hit," said Takashi Aoki of Mizuho Asset Management Co. "People aren't spending money at shopping malls and they certainly aren't driving there either."

Gasoline surged to a record ¥160.3 a liter last week and went up again this weekend. The tax rate fell for one month in April after the government failed to agree on a revenue bill.

The nation's carmakers are reducing their reliance on mature markets such as Japan and the U.S., where sales are slowing, and expanding in emerging markets. Japan's stagnant wages and a shrinking population dragged vehicle sales, excluding minicars, to their lowest level in 35 years last year.

Sales at Nissan dropped 11.4 percent to 33,681 vehicles. Toyota Motor Corp.'s sales fell 2.8 percent to 105,519 vehicles in May. Honda Motor Co. sold 26,900 vehicles, a 5.1 percent increase, helped by its revamped Fit compact.

New Teana launched

Nissan Motor Co. launched a fully remodeled Teana luxury sedan Monday, aiming to sell 1,000 a month.

The stylish sedan with a sunroof became the first Nissan model introduced in the domestic market as a vehicle developed on a new D platform, which offers drivers more comfort and stable maneuverability, the automaker said.